Silver prices slip to year-to-date lows as investment demand wanes and inventories rise
Metals Focus says weakening investment demand and higher inventories are pressuring silver, while gold holds near $4,000 per ounce.
Silver fell to fresh year-to-date lows, trading around $52.06 an ounce, while gold stayed near $4,015 per ounce, according to recent market data. Analysts at Metals Focus noted that the gold-silver ratio has risen above 76, its highest level since December 2025, reflecting silver’s underperformance relative to gold.
The firm attributes the drop to several factors: higher volatility in silver, persistent inflation pressures, and rising bond yields that increase the opportunity cost of holding non-yielding metals. Although the Federal Reserve left rates unchanged, its continued tightening bias and market expectations of a 25-basis-point hike in December keep pressure on precious metals.
Metals Focus highlighted that gold benefits from its monetary role and safe-haven demand, supported by central-bank purchases and long-term investors. In contrast, silver is more exposed to industrial demand and speculative flows, which have weakened. Physical market fundamentals have also turned sour, with London vault inventories climbing to 932 million ounces—the highest in nearly four years—and available supply outside exchange-traded products nearly doubling since October 2025.
Investment demand has receded, as global silver-backed exchange-traded products shed about 60 million ounces since the start of the year, and net managed-money long positions in CME silver futures fell to 17 million ounces, the lowest level since February 2024. Bullion coin sales in the second quarter dropped more than 80% compared with the first quarter, reaching the lowest quarterly level recorded since the survey began in 2010.
Looking ahead, Metals Focus expects the silver market deficit to narrow this year and shift into surplus by 2027, reducing the likelihood of a physical market squeeze. The analysts caution that higher interest rates and bond yields could keep downside pressure on silver in the near term, though they do not foresee the metal’s lag behind gold lasting indefinitely.